Regional airline capacity, tourism demand and housing prices: A case study of New Zealand

Kan Wai Hong TSUI, David TAN, Kong Wing Clement CHOW, Song SHI

Research output: Journal PublicationsJournal Article (refereed)

1 Scopus Citations

Abstract

Tourism is one of the most important economic activities in New Zealand as tourists commonly travel by air to the various regions of this geographically isolated archipelago. This paper aims to investigate: (i) how regional tourism demand and airline capacity affect each other; and (ii) how both affect the housing prices in New Zealand's smaller regions. The paper empirically examines these inter-relationships between regional tourism demand and air transport, and their joint effects on the housing prices by constructing a three-stage least squares (3SLS) structural model employing a panel dataset of New Zealand's six smaller airports and regions from January 2008 to December 2014. Empirical results showed that increased regional tourism activity raises airline capacity and vice versa. Importantly, domestic airline capacity has a statistically significant impact on regional housing prices but not regional tourist demand (with the exception of Queenstown as a major and popular tourist centre). Policy implications of the key findings for regional tourism and air transport developments are discussed.
Original languageEnglish
Pages (from-to)8-22
Number of pages15
JournalTransport Policy
Volume77
Early online date28 Feb 2019
DOIs
Publication statusPublished - May 2019

Fingerprint

New Zealand
tourism
Tourism
housing
demand
Air
tourist
air
Airports
Economics
airport
structural model
economic activity
archipelago
travel
price
economics

Keywords

  • 3SLS structural model
  • Airline capacity
  • New Zealand's smaller airports
  • Regional economy
  • Regional housing prices
  • Regional tourism demand

Cite this

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title = "Regional airline capacity, tourism demand and housing prices: A case study of New Zealand",
abstract = "Tourism is one of the most important economic activities in New Zealand as tourists commonly travel by air to the various regions of this geographically isolated archipelago. This paper aims to investigate: (i) how regional tourism demand and airline capacity affect each other; and (ii) how both affect the housing prices in New Zealand's smaller regions. The paper empirically examines these inter-relationships between regional tourism demand and air transport, and their joint effects on the housing prices by constructing a three-stage least squares (3SLS) structural model employing a panel dataset of New Zealand's six smaller airports and regions from January 2008 to December 2014. Empirical results showed that increased regional tourism activity raises airline capacity and vice versa. Importantly, domestic airline capacity has a statistically significant impact on regional housing prices but not regional tourist demand (with the exception of Queenstown as a major and popular tourist centre). Policy implications of the key findings for regional tourism and air transport developments are discussed.",
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Regional airline capacity, tourism demand and housing prices: A case study of New Zealand. / TSUI, Kan Wai Hong; TAN, David; CHOW, Kong Wing Clement; SHI, Song.

In: Transport Policy, Vol. 77, 05.2019, p. 8-22.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - Regional airline capacity, tourism demand and housing prices: A case study of New Zealand

AU - TSUI, Kan Wai Hong

AU - TAN, David

AU - CHOW, Kong Wing Clement

AU - SHI, Song

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AB - Tourism is one of the most important economic activities in New Zealand as tourists commonly travel by air to the various regions of this geographically isolated archipelago. This paper aims to investigate: (i) how regional tourism demand and airline capacity affect each other; and (ii) how both affect the housing prices in New Zealand's smaller regions. The paper empirically examines these inter-relationships between regional tourism demand and air transport, and their joint effects on the housing prices by constructing a three-stage least squares (3SLS) structural model employing a panel dataset of New Zealand's six smaller airports and regions from January 2008 to December 2014. Empirical results showed that increased regional tourism activity raises airline capacity and vice versa. Importantly, domestic airline capacity has a statistically significant impact on regional housing prices but not regional tourist demand (with the exception of Queenstown as a major and popular tourist centre). Policy implications of the key findings for regional tourism and air transport developments are discussed.

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